Is Bitcoin a currency? This question has been appearing in the discussion for some time right now. However, Mr. Damodaran is pretty sure about his answer.
4 August, AtoZForex – Bitcoin’s price has been on a crazy rally this year. Yet, some of the industry players are not convinced it has sufficient features to be called a currency. Also, they claim that Bitcoin still needs to prove to be useful. But most importantly, it needs to be accessible.
Is Bitcoin a currency? NYU professor says not yet
NYU finance professor Aswath Damodaran thinks exactly that. Mr. Damodaran is a professor of corporate finance and valuation at New York University’s Stern School of Business. He believes that Bitcoin needs to prove that it is a fully accessible invention. Only in this way it can be successful. Mr. Damodaran believes that cryptocurrencies cannot be called a success. The NYU professor has written in a blog post:
“If you don’t believe that Bitcoin will ever acquire wide acceptance in transactions, it is the time that you were honest with yourself and recognized that is just a lucrative, but dangerous, pricing game with no good ending.”
In addition, Mr. Damodaran believes that the top cryptocurrencies have succeeded in attracting investors. He states that such digital currencies as Bitcoin and Ethereum have achieved good results in making a name in this trend.
However, in terms of currency, they did not make enough steps. Mr. Damodaran highlights that acceptance and adoption of Bitcoin is still lagging.
Key Bitcoin acceptance obstacles
Nevertheless, the professor thinks that Bitcoin’s high price and speedy growth is reasonable if it can be accepted as a form of payment. He further adds that the high demand for Bitcoin is just a consequence of a limited supply. There are only 21 million Bitcoins in the Blockchain network.
Aside from the high popularity, the usability of Bitcoin is not widespread. It is even going backward. Out of the top 500 online retailers, only three presently accept Bitcoin. This is five points down from last year.
Bitcoin transaction fees and slow confirmations of payments appear as key obstacles to the acceptance success. Yet, there is a chance that the recent Bitcoin fork can impact the scaling Bitcoin issues.
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